SOCIAL FACTORS IN USER PERCEPTIONS AND RESPONSES TO ADVERTISING IN ONLINE SOCIAL NETWORKING COMMUNITIES Fue Zeng, Li Huang, Wenyu Dou ABSTRACT: With the advent of popular Web destinations such as MySpace and Facebook, online social networking communities now occupy the center stage of e-commerce. Yet these online social networking communities must balance the trade-off between advertising revenue and user experience. Drawing on the sociology and advertising literature, this study investigates the impacts of social identity and group norms on community users' group intentions to accept advertising in online social networking communities. By outlining how this type of group intention could influence community members' perceptions and value judgments of such advertising, this study delineates possible mechanisms by which community members may respond positively to community advertising. The authors test the proposed theoretical framework on a sample of 327 popular online community users in China and obtain general support. Implications for the prospect of advertising in online social networking communities are discussed. Keywords: Online social networking communities, advertising responses, social factors. With the advent of popular Web destinations such as MySpace and Facebook, a new kind of online community now occupy the center stage in e-commerce, namely, social networking communities (Bausch and Han 2006). eMarketer (2009) projects that advertising revenue from social network communities in the United States will reach more than 17.9 million, or 15% of total U.S. online advertising revenues, by 2013. The popularity of online networking communities also has been growing in other parts of the world. More than 200 million users per month visit QQ-Zone, the Chinese online social networking community, which is considered the largest social network site in the world (McLeod 2006). Leveraging this huge base of community users, QQ.com earned US$120.9 million in online advertising revenue in 2008 (Tecent 2008). The rapid growth of online social networking communities has caught the attention of advertisers that hope to find new ways to harness these communities for their advertising purposes (Hart 2007). However, as the communities battle to garner long-term, sustainable advertising revenues, they encounter the severe risk that members will feel exploited if the sites suddenly appear overrun with ads (Mesure and Griggs 2007). The burgeoning industry thus has been under increasing public pressure to strike a balance between the need to generate advertising revenue and members' demand for uninterrupted social experiences (Nutley 2007). A 2008 report by IDC found that 43% of social network users never clicked on ads, a dramatic difference from the 80% of other Internet users who did so at least once a year. Furthermore, 23% of nonusers of online communities who clicked on an ad then made a purchase, whereas only 11% of social network users who clicked on ads did the same (eMarketer 2009). Little academic research addresses the concerns held by community organizers about how to convince users to be more receptive to advertising in online social communities. In particular, though various e-commerce studies investigate online communities (e.g., Bagozzi and Dholakia 2002; DeKay 2009; Gangadharbatla 2008), none has explored members' perceptions or acceptance of advertising in social network communities. To gain insights into this important area of research and application, we draw on sociology and advertising literature to examine how social identity and group norms of online community members may influence perceptions of and behavioral responses to advertising. This study therefore makes several theoretical contributions. First, an emerging stream of e-commerce literature uses sociological perspectives to examine how social factors may influence community members' participation in communities; we extend this line of inquiry by exploring a different set of outcome measures, namely, how community members perceive and react to advertising in community sites. Second, we bridge the link between sociological factors in online communities and advertising responses by including group intentions (Bagozzi and Dholakia 2002) and establishing that group intentions to accept advertising in online communities shapes community members' perceptions of that advertising. This application of the group intention perspective is novel in this context and identifies a route by which community members may demonstrate receptiveness to advertising in Journal of Interactive Advertising, Vol 10 No 1 (Fall 2009), pp. 1 13. © 2010 American Academy of Advertising, All rights reserved ISSN 1525 2019